23 Nov, 2011

AT&T and T-Mobile USA deal faces regulatory obstacle


The proposed $39bn takeover of T-Mobile USA by AT&T is having to navigate several setbacks before completion, the latest of these being the news that the chairman of the Federal Communications Commission (FCC) is looking to refer it to an administrative hearing.


According to the Financial Times, the FCC said yesterday (Nov. 22): “The record clearly shows that – in no uncertain terms – this merger would result in a massive loss of US jobs and investment.”


The referral will no doubt delay completion of the transaction, which was expected to be done before the beginning of 2012. AT&T commented: “The FCC’s action is disappointing. It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both,” the FT reported.


This decision to refer follows the earlier decision by the Department of Justice to attempt to block the deal due to anti-trust reasons – this hearing will not take place until February.


The referral will no doubt be a major source of concern for both T-Mobile and AT&T, as the last such review ordered by the FCC involved a deal between EchoStar and DirectTV, which was subsequently dropped.  

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